Mehabe score: 5 G Factor: 3 Piotski Score: 7 The stock has a rating OBSERVE & HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 3 and Piotski score of 7.
Description
Golkunda Diamonds & Jewellery is engaged in the business of Manufacturing of Gold Jewellery Studded with Diamonds and Other Stones.Site:523676
Market Cap:
Rs 31.4 cr
Price:
45.2
Trading pe:
37.4x
Book-value:
40.1/share
Div yield:
2.21 %
Earning yield:
5.19%
Face-value:
10.0/share
52week high:
50.25
52week low:
13.30
Technical Analysis
Stock trades at 45.2, above its 50dma 31.25. It also trades above its 200dma 22.18. The stock remains bullish on techicals
The 52 week high is at 50.25 and the 52week low is at 13.30
Price Chart
P/E Chart
Sales and Margin
Strengths
– Stock is trading at 1.13 times its book value
– has been maintaining a healthy dividend payout of 24.39%
-Debtor days have improved from 136.22 to 94.61 days.
Weakness
– has low interest coverage ratio.
– has a low return on equity of 5.54% for last 3 years.
– might be capitalizing the interest cost
Competition
– The industry trades at a mean P/E of 23.1x. Titan Company trades at the industry’s max P/E of 159.24x. 523676 trades at a P/E of 37.4x
– Industry’s mean G-Factor is 4.0 while the mean Piotski score is 7.0. 523676 has a G-Factor of 3 and Piotski scoreof 7.
– Average 1 month return for industry is 24.8%. The max 1- month return was given by Golkunda Diamond: a return of 116.03 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 75.79 cr compared to Rs 32.85 cr for period ended Mar 2020, a rise of 130.7%
Operating Profits reported at Rs 3.63 cr for period ended Mar 2021 vis-vis 0.96 for period ended Mar 2020 .
Operating Margins expanded 186.7 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 3.23 compared to Rs 0.39 for previous quarter ended Dec 2020 and Rs 0.57 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 173.0 cr for period ended Mar 2021 vis-vis sales of Rs 133.0 cr for the period ended Mar 2020, a healthy growth of 23.1%. The 3 year sales cagr stood at 26.2%.
Operating margins shrank to 3.0% for period ended Mar 2021 vis-vis 4.0% for period ended Mar 2020, contraction of 100.0 bps.
Net Profit reported at Rs 3.0 cr for period ended Mar 2021 vis-vis sales of Rs 2.0 cr for the period ended Mar 2020, rising 33.3%.
Company recorded a healthy Net Profit CAGR of 44.2% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 8.0% compared to 6.0% over the last 3 Years. – The stock has given a return of 215% on a 1 Year basis vis-vis a return of 51% over the last 3 Years. – The compounded sales growth on a TTM bassis is -2% vis-vis a compounded sales growth of 17% over the last 3 Years. – The compounded profit growth on a TTM basis is -63% vis-vis a compounded profit growth of 38% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Mar 2021 public holding stood at 26.64% vis-vis 26.64% for Dec 2020
Conclusion
– Stock is trading at 1.13 times its book value
– has been maintaining a healthy dividend payout of 24.39%
-Debtor days have improved from 136.22 to 94.61 days. – has low interest coverage ratio.
– has a low return on equity of 5.54% for last 3 years.
– might be capitalizing the interest cost
Fundamentally, the stock remains weak on business fundamentals. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock trades above its 50 DMA 31.25 and is trading at 45.2 It has shown near term bullish momentum contrary to business fundamentals. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
